Bank of America “has an $8.4 million, seven-year contract with Michigan State giving it access to students’ names and addresses and use of the university’s logo. The more students who take the banks’ credit cards, the more money the university gets. Under certain circumstances, Michigan State even stands to receive more money if students carry a balance on these cards.”

I connect the the dots this way: First, the projected defaults for AmEx suggest that trouble is climbing the income ladder. Second, the projected defaults suggest that the economic news is going to get uglier in 2009. And, third, the credit card issuers’ plan to avoid complete collapse is to find more people to borrow money, presumably at prices high enough to offset the losses. And all three dots suggest the plan won’t work.

Credit card companies will often pressure parents to pay off the balances that their student children accumulate on university facilitated credit cards, often without their knowledge. They aggressively inform the parents that their children will face bleak futures if their credit ratings are poor, because they will be unable to buy cars, or rent apartments, or even to obtain employment because some employers run credit checks on prospective employees. I couldn’t do my job without a credit card. Hotels will not even make reservations for someone who does not have a credit card. When I travel for work, or to host people visiting the law school for professional reasons, I am usually required to front all expenses, and then wait to be reimbursed, which sometimes takes months. I think this phenomena is true for a lot of people, and the credit card companies energetically exploit it.